Economic Benefits of Publicly Funded International Research, Development and Innovation Collaborations

Governments spend public money encouraging UK businesses to collaborate internationally on research and innovation, on the assumption that reaching beyond domestic partners brings extra value. In this report we tested that assumption directly. We linked data from Gateway to Research, the UK Intellectual Property Office, and the ONS Business Structure Database, and tracked UK businesses in UKRI-funded collaborative projects between 2006 and 2023. We then compared businesses that collaborated internationally against otherwise similar businesses that collaborated only within the UK. We looked at six outcomes: growth in employment, turnover and productivity, and growth in patent, trademark and design applications.

The results show that international collaboration does bring additional benefits over domestic collaboration alone, but who gets them, and what kind, varies. Projects funded by Innovate UK tend to boost patenting and design activity; those funded by the Research Councils tend to boost employment, turnover and productivity. The gains are also concentrated in particular places such as high-tech manufacturing and knowledge-intensive services, larger and better-resourced projects, and firms that build international partnerships on top of their domestic ones rather than instead of them. For policymakers, the practical message is that international collaboration isn’t a universal lever. It works best for certain kinds of businesses, in certain sectors, funded in certain ways. A programme aimed at boosting patents should look different from one aimed at boosting jobs, and support aimed at a small tech start-up should look different from support aimed at a large established manufacturer. Spreading funding evenly across all firms and sectors is unlikely to deliver the same results as targeting it towards the businesses most likely to benefit.

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